LaShonda Debrew | CPA Upper Marlboro Maryland CPA LaShonda DeBrew
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Maryland Income Tax

Maryland Income Tax Rates

Maryland Income TaxThe Maryland income tax you pay will be a percentage of your earnings and will be impacted by your annual revenue. In addition to these graduated tax rates, non-residents will also be subject to an additional 1.25 percent tax on all their earnings.

When Are Maryland Income Taxes Due?

In Maryland, both state and federal taxes share the same deadline of April 15th. The exception is when this day falls on a day when there isn’t mail service available, such as on Sunday or an observance of a federal holiday. Your local taxes will be collected on the same forms as the state taxes.

What are the Maryland Income Tax Rate Brackets?

The Maryland income tax rate brackets are individual, graduated tax rates that are assessed on the taxable income of individuals. To determine the actual amount owed based on your income, the use of a tax calculator or professional Maryland state income tax preparation is recommended. Individuals with a taxable income of under $1,000 will have that amount subject to a tax of 2 percent. This amount then increases to 3 percent when your income is between $1,001 and $2,000. From $2,001 – $3,000 you are taxed at 4 percent. The next of the Maryland tax rate brackets is when you earn between $3,001 and $100,000. If your taxable state income is between these values, you will need to pay 4.75 percent of your income. You will find that if you earn at least $100,001 but no more than $125,000, your rate increases to 5 percent of your taxable income.
Now, if you make more than $125,001 but no more than $150,000, your tax rate is 5.25 percent, this increases to 5.50 percent if you reach $150,001 to $250,000. Once you have reached $250,000 or more, your rate remains at 5.75 percent. Since these are marginal tax brackets, that will mean if your income exceeds the tax bracket, you pay the full percentage on the top of the bracket, plus a percentage on your income that falls in the following bracket. For example, if you make $3,000 you will pay $20.00 for your income on the first bracket and then 4 percent on the additional thousand dollars. That will bring your total tax liability to $60.

How to File Annual Maryland Income Tax

Those who want to know how to file Maryland income tax annually for Maryland without using snail mail or a tax preparation service can consider doing so online. With the proper tax software, you are able to file your Maryland income tax online over the internet at the same time you do your federal filings. The best method would be to use the state’s own iFile system that is available. It does require that you have a recently updated browser in addition to the latest version of Adobe Acrobat installed on you system. To continue, you will need to determine if you are eligible for online filing. If you have to file any of the following forms, you will need to complete the process through the mail.
  • 500CR
  • 1042S
  • 515
  • 505
In a cases where you have more than 50 1099s or W2s to report, you will also have to file your taxes offline. If you aren’t comfortable completing this process on your own, professional Maryland income tax preparation may be one of the best choices for you. Something to keep in mind is that if this is your first time filing a tax return in the State of Maryland, you must also complete EL101. If you are filing online, you will be presented with the opportunity to do so online. You should ensure that you do so. In some cases, a printed copy may be required; the system will prompt you if it is required. When you in the system, you will need to begin by reviewing the year you need to file for. This can be done in the section where you choose a tax year and form type. Now, you can login with your last name, your social security number and the password you selected to use from the previous year.
If you are new to the system, you will be asked to answer some questions in addition to your full name. At this time, you will register a password that you will use annually. When this is done, you will begin to complete the form, ensuring that each of the required sections is completed with complete and accurate information. Since the system is based on exact dollar amounts, you will need to round down to the nearest dollar if a value is less than .50 and up if the amount is .51 or more. All this information should come from any W2 and 1099s you have received. Once you have entered this information, you will click on the tax summary page to review the complete information. If you need to modify any information, it can be done at this time by choosing the change entry feature. Using the back button will not work in this case. As soon as everything is correct, you will click submit. If anything further is required of you, instructions will be provided to you. Otherwise, you will want to print the confirmation that states you have successfully submitted your tax return form. Filing your Maryland income tax isn’t a complicated process. Once you understand the tax brackets and understand the process, you shouldn’t have too many problems handling your taxes annually.